The reason the award is so expensive is because of the gold plating on the outside of each statuette. If it did not contain any gold, an Oscar would be worth less than $100!And that's just the materials, not taking into account the labor costs. It takes 10 people more than 5 and a half hour to create each one. Each statue is polished to perfection, and just the polishing requires an entire hour per statue! It ends up taking 3-4 weeks to create all the statues for the awards ceremony.
Of course, the statues weren't always this expensive. A metal shortage in World War II resulted in a switch from the original material to plaster. The plaster Oscars were returned after the war and exchanged for the real thing.